The future of the restaurant trade is built now

Text: Laura Iisalo
Photos: Petri Jauhiainen

The past 18 months have tested the restaurant business but the pandemic is not the only defining factor. A doctoral candidate at the University of Eastern Finland, Sini Kauhanen, is working on her thesis to get a full picture of the trade, because she is concerned about its future.

When Kauhanen was working on her master thesis she noticed that even though the hospitality industry is well researched, there are not many academic articles available about the restaurant trade. Her thesis will be the first of its kind in the field of economics.

Kauhanen is going to prepare a so called PESTEL analysis, which looks into the political, economic, social, technological, environmental, and legal aspects that affect the trade. She is also an entrepreneur in real estate, and has friends and tenants in the restaurant business, who provide Kauhanen with up-to-date information.

– The COVID-19 pandemic has caused major losses for many restaurants that have been forced to take loans, some have gone under. A big chunk of the laid-off waitresses and chefs have understandably found some other type of work. The current situation is catastrophic, Kauhanen says.

A past shaped by laws

Apart from the present, Kauhanen will also dig deep into the past. Her research material consists of theses, memoirs, histories, textbooks, and 40 years’ worth of Vitriini magazines published by the national trade and labour market association. It has already become clear that the political and legal aspects have set a strict framework for the trade throughout history.

Apart from Finnish alcohol policies and serving rules, opening times, and tax regulation, one of the defining elements was joining the EU, which was warmly welcomed by the industry. The reality was adverse because with the EU came VAT of 22%, which had up until then been unheard of in the service sector. The affects were dramatic.

Changes in the Tobacco Act, and especially its gradual implementation, caused dissatisfaction in the 1990’s and 2000’s.

– Many restaurants invested tens of thousands of euros to acquire the required air conditioning. Soon the act was amended, and the restaurants had to arrange a smoking room or prohibit smoking altogether. A lot of money was wasted, says Kauhanen.

Serving rules stating that alcohol could not be purchased without food, prohibition of dancing in restaurants, and the demand that women had to be accompanied by a man have also stayed in the history books. Kauhanen says that getting to know the past has strengthened the idea of how external factors have affected the trade, and still do.

Aiming for change

Kauhanen believes that the restaurant trade has a huge potential if utilised, which could tremendously affect the employment rate and economics. Her hope is that the decision makers would listen to those involved in the industry, which is why she plans to interview restaurateurs and other experts in the field for her thesis.

– I will bring up how they would change the trade, what they think should be improved, or how things should be done differently. I would like to open up the eyes of the decision makers, and I hope that I succeed in that. My goal is not to blame the politicians and officials but to revive and develop the industry, she says.

If Kauhanen could decide, she would also ease the taxing of alcohol served in restaurants because it could shift consumption from homes to restaurants. The standpoint is not a new one – the matter was discussed in the Vitriini magazine already in the 1970’s.

– We have now spent 40 years contemplating how to get people to leave their homes and go to restaurants but nothing has changed. My goal is that the next person working on a thesis in 40 years’ time doesn’t have to realise that we have pondered the same thing for 80 years already, says Kauhanen.

Doctoral candidate Sini Kauhanen reveived grants in 2020 and 2021 for her thesis about the Finnish restaurant trade.